R-Squared Energy Blog

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The Benefits of $4 Gas

There is a great article today in Time. It covers a lot of ‘hot button’ issues with me, such as suburban sprawl, shorter work weeks, and conservation:

10 Things You Can Like About $4 Gas

Gas prices are near $4 per gal., as no one needs to tell you, and they are likely to stay that way. Most of us still don’t have the alternatives we need to adapt with grace, which means that many will adapt just by suffering. We will run out of gas on I-80, ease our minivans over to the shoulder and tell the kids everything is O.K. We’ll fall behind on Visa bills to pay for gas so we can buy food made ever more expensive by energy costs.

But it’s also true that Americans are finding options where there seemed to be none. They’re ready to change — and waiting for their infrastructure to catch up. They are driving to commuter-rail lines only to find there are no parking spots left. They are running fewer errands and dumping their SUVs. Public-transit use is at a 50-year high. Gas purchases are down 2% to 3%. And all those changes bring secondary, hard-earned benefits.

“You suddenly are reminded how the economy works,” says Eric Roston, author of a new book about energy, The Carbon Age. “Nobody wants high prices for oil. But there’s also no faster mechanism to change behavior.” The suffering will go on. But the story, like any good tragedy, is not without redemption.

This is EXACTLY why I have long advocated higher carbon taxes. The suffering in that case could have at least been managed. In fact, had we instituted carbon taxes and used the money to incentivize fuel efficient vehicles and public transport, people would have not only had the expectation of higher prices, but also the means with which to adjust. Instead, people held out hope that price spikes were temporary, and so they didn’t adjust. Now that they don’t have a choice but to adjust, we get a lot more suffering than was necessary, and most people aren’t prepared. And of course we get empty promises from our political leaders about bringing prices back down – which results in more delays as some people will wait to see what happens.

This also points to the reasons I am not a ‘Doomer.’ I believe people will adjust, and that we will come up with solutions. But I also believe that due to our lack of preparation, we will undergo some difficult years. If prices hang around at these levels, then the faster people make the necessary decisions to reduce their carbon footprint, the less suffering there will be.

What we desperately need now is strong leadership. We need our political leaders to not only say “We are addicted to oil”, but to explain that there are no easy fixes. We need them to be up front that there is no relief coming from these prices, and we need them to provide incentives to speed up the changes we need to make (more fuel efficient vehicles on the roads, more riders on mass transit, more carpooling, etc.).

Lack of leadership got us to where we are. The cynical side of me says that lack of leadership will help delay the responses people need to make to adjust.

July 3, 2008 Posted by | car pooling, carbon tax, gas prices, gas tax | 11 Comments

The Fate of the Small Rural Town

Update: Today’s Drumbeat at The Oil Drum features two additional stories covering this issue:

Gas guzzlers and ‘ghostburbs’

SUV factories closing, bicycle sales and train use rocketing, commuter belts becoming “ghostburbs” as residents flock to the inner cities . . . welcome to 2008 America, where soaring oil and petrol prices have triggered a sudden revolution in travel behaviour and a seismic upheaval in the automobile industry.

High gas prices threaten to shut down rural towns

There are no utilities and no public transportation in this unincorporated town of a couple hundred people along a narrow road that winds through the mountains 314 miles north of Sacramento. Many people here buy gas for their vehicles and gas or diesel for generators that power their homes.

“I’m scared to death” of rising fuel prices, Hanley says. At the store, the hub for visiting whitewater rafters and residents of other isolated towns, gas cost $5.30 a gallon on a recent day when the national average was $4.07.

This community may be an extreme example of how rising gas prices are hitting rural Americans particularly hard, but people in small towns from Maine to Alaska are in a similar bind as those here.

Also a story on the situation I noted on my drive down to Texas with fewer RVs on the road:

For many, golden years mean less travel, more work

“We’re sitting with a calculator in one hand and a map in the other, trying to figure out how far we’re going to get when we get 7 miles a gallon,” says Lynda Perdew, 61.

Like the Perdews, many older Americans had long envisioned retirement as a period of adventure — a time to indulge in leisurely lifestyles, with frequent trips out of town to see relatives and explore places they’d never seen. That was then. Now, with food and health care costs surging and fuel prices soaring, many retirees have been forced to downsize their dreams of travel.

There were small, rural towns across America before the automobile and cheap oil came onto the scene. But some that even struggled to maintain their populations in an era of cheap energy may be destined to become ghost towns due to rising oil prices. I pondered this during my recent drive across arid areas of Montana, Wyoming, and Nebraska. Towns need food, water, and jobs – to name a few necessities – in order to survive. Water often comes to small rural towns in the West by drawing down fossil aquifers. Food comes via the same route, or is shipped in via ever more expensive long-haul trucking. Jobs are often many miles away, and the commute is becoming much more painful at today’s gas prices:

High Gas Prices Threaten to Drain Small Towns’ Populations

Don Campbell’s daily commute to Kansas City – about 100 miles each way – costs him roughly $866 a month at $3.90 per gallon. But he’s a union iron worker and says he can make the math work.

Most of his neighbors can’t. For them and thousands of other small-town residents across the country who drive long distances to jobs that pay little more than minimum wage, the high cost of gas is making that daily commute cost-prohibitive.

So much so that economists predict that over the next few years, the country could see a migration that would greatly reduce the population of Small Town America – resulting in a painful shift away from lifestyle, family roots, traditions and school ties.

The expected exodus from small towns, said Don Macke, a widely considered authority on rural economics and head of the Center for Rural Entrepreneurship in Lincoln, Neb., will be far more profound than the gradual erosion that has been going on since World War II. That decline was due to the country’s shift away from an agrarian economy and a choice for convenience: People wanted to be closer to jobs, shopping and entertainment.

The new flight, Macke thinks, will be more out of necessity.

As I recently reported, some are making ends meet by discovering the car pool. Others are trading their trucks and SUVs in for fuel efficient models. (You may have seen today that Ford’s sales are down sharply, as they can’t move their large models, and they can’t keep up with the demand for the small ones).

Most people, however, fall into this category:

Her father may leave Dixon and move closer to Freeburg, but Tracy Rector isn’t yet ready to commit to such a drastic move from her hometown.

“But I’m like most people – I don’t know what to do.”

That’s a big reason I started writing – to try to shed some light on the topic of energy so some people have a better idea of what to do. Most of my friends and family fall into that category: Gas prices are going up, and they don’t know what to do. As I always say to them, prepare for the future as if gas is going to be $10 a gallon.

Ultimately, the small, rural towns with good farmland and water resources should do OK in the post-cheap-oil era. But a lot of small towns that sprung up in the age of the automobile are likely to fade away as people move closer to jobs in the city. And if you live in one of those small towns, and you depend on cheap gas to get to a job far away, you better start thinking of a contingency plan because the days of cheap gas are over.

July 2, 2008 Posted by | car pooling, gas prices | 27 Comments